THE IMPACT OF DECOYS AND BACKGROUND INFORMATION ON CONSUMERS PREFERENCES AND DECISION MAKING F. Buoncristiano1, D. Scarpi21Management, University of Bologna, 2Management, University of Bologna, Bologna, Italy For students only: do you wish to submit your paper to the Student Competition: :YesPresentation Method:Oral PresentationKeyword 1:context effectsKeyword 2:decision makingKeyword 3:decoyKeyword 4:backgroundKeyword 5:attractionThe process through which consumers form their preferences resembles more a work of architecture and building, starting from certain base-values, rather than an archaeological work of digging for bringing to light pre-existent preferences (Gregory et al., 1993). It is precisely in this frame that context dependent effects can (and do) take place. That is to say, in a nutshell, the composition and the framing of the choice-set influence the final choice. A great deal of attention has been paid to the study of context effects, which in very recent times have got great momentum. Our study focuses on some of the most important, quoted and discussed effects, namely 1-attraction (Huber et al. 1982; Simonson-Tversky 1992) 2-background (Tversky-Simonson 1993) and 3-phantom options (Praktanis-Farquhar 1992; Carpenter et al., 1994; Janiszewiski 2002).Unfortunately, there are just a few empirical analyses for (some of) these effects considered separately, and no study analyses them simultaneously. Therefore, although the literature makes some interesting points, there is little way to say something about their relevance. Our study aims at filling this gap, empirically analysing their interplay and combination, thus answering the calls by the most recent literature (Novemsky et al. 2004, Sheng et al. 2005) for studying the interactions between different “irrational” phenomena, as in the real world context effects come together. This allows the advancement of quite new research hypotheses investigating the effects, the strength and the direction following the introduction of a decoy in the choice set, with different background information (e.g. background information is conflicting with the decoy). This contribution also aims at assessing to what extend the nature of the decoy is relevant, comparing the effects of a real and a phantom decoy. At the same time, we aim at providing useful suggestions to practitioners as the hypotheses are tested on a large dataset of 600 consumers, collected by means of a website for the sale of products, rather than using a small convenience sample of students with a paper-and-pencil questionnaire (see Lynch 1982, Calder-Tybout 1999 for a debate about student samples). Care has been put so to select a product (mp3 players) familiar to the sample, of frequent purchase, managerially relevant, and coherent with the setting for data collection (the Internet). Results show that at least some of the context effects are not independent, and should therefore be considered together to provide a better understanding of decision making. By manipulating the placement of a decoy option, the nature of the decoy and consumer’s backgrounds, one can in fact influence consumers’ preferences and amplify/reduce the magnitude of certain evaluative “abnormalities”. Although we acknowledge the limitations of our analysis, we believe it provides 1-a contribution towards a deeper and more systematic understanding of the interactions between context effects, and 2-useful results of clear managerial relevance.

The impact of decoys and background information on consumer preferences and decision making

D. Scarpi
2006

Abstract

THE IMPACT OF DECOYS AND BACKGROUND INFORMATION ON CONSUMERS PREFERENCES AND DECISION MAKING F. Buoncristiano1, D. Scarpi21Management, University of Bologna, 2Management, University of Bologna, Bologna, Italy For students only: do you wish to submit your paper to the Student Competition: :YesPresentation Method:Oral PresentationKeyword 1:context effectsKeyword 2:decision makingKeyword 3:decoyKeyword 4:backgroundKeyword 5:attractionThe process through which consumers form their preferences resembles more a work of architecture and building, starting from certain base-values, rather than an archaeological work of digging for bringing to light pre-existent preferences (Gregory et al., 1993). It is precisely in this frame that context dependent effects can (and do) take place. That is to say, in a nutshell, the composition and the framing of the choice-set influence the final choice. A great deal of attention has been paid to the study of context effects, which in very recent times have got great momentum. Our study focuses on some of the most important, quoted and discussed effects, namely 1-attraction (Huber et al. 1982; Simonson-Tversky 1992) 2-background (Tversky-Simonson 1993) and 3-phantom options (Praktanis-Farquhar 1992; Carpenter et al., 1994; Janiszewiski 2002).Unfortunately, there are just a few empirical analyses for (some of) these effects considered separately, and no study analyses them simultaneously. Therefore, although the literature makes some interesting points, there is little way to say something about their relevance. Our study aims at filling this gap, empirically analysing their interplay and combination, thus answering the calls by the most recent literature (Novemsky et al. 2004, Sheng et al. 2005) for studying the interactions between different “irrational” phenomena, as in the real world context effects come together. This allows the advancement of quite new research hypotheses investigating the effects, the strength and the direction following the introduction of a decoy in the choice set, with different background information (e.g. background information is conflicting with the decoy). This contribution also aims at assessing to what extend the nature of the decoy is relevant, comparing the effects of a real and a phantom decoy. At the same time, we aim at providing useful suggestions to practitioners as the hypotheses are tested on a large dataset of 600 consumers, collected by means of a website for the sale of products, rather than using a small convenience sample of students with a paper-and-pencil questionnaire (see Lynch 1982, Calder-Tybout 1999 for a debate about student samples). Care has been put so to select a product (mp3 players) familiar to the sample, of frequent purchase, managerially relevant, and coherent with the setting for data collection (the Internet). Results show that at least some of the context effects are not independent, and should therefore be considered together to provide a better understanding of decision making. By manipulating the placement of a decoy option, the nature of the decoy and consumer’s backgrounds, one can in fact influence consumers’ preferences and amplify/reduce the magnitude of certain evaluative “abnormalities”. Although we acknowledge the limitations of our analysis, we believe it provides 1-a contribution towards a deeper and more systematic understanding of the interactions between context effects, and 2-useful results of clear managerial relevance.
2006
CONFERENCE PROCEEDINGS, Paris, France, 5-8 July 2006
21
29
F., Buoncristiano; Scarpi, D.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/28824
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